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Low interest rates definitely explains part of it. The one-year treasury bond rate is at 0.6%, which means that unloading the goods now instead of next year is
by ThrustVectoring 10y ago
Low interest rates definitely explains part of it. The one-year treasury bond rate is at 0.6%, which means that unloading the goods now instead of next year is worth only $87M if you assume no losses from business disruption.
- vegabook 10y agonitpick -> I see 0.006 * 14.5bn as 87m? Or am I doing something wrong? Also you have to factor in that a large proportion of the goods might have sizable negative time value, especially if they're perishable, but also if there is any (highly likely) proportion of obsoletable tech in there. Perhaps that's what you mean by business disruption?
- ThrustVectoring 10y agoThat was really fail mental math. Editing to fix. And yeah, obsolete tech is a business disruption, as is perishable goods. I wanted to also include things like having to pay a premium to expedite replacement inventory so that your store or factory keeps working while the goods are stuck on a ship.
- khuey 10y ago"No losses from business disruption" is doing a lot of work there. These containers aren't full of fungible raw materials, they're largely full of products meant to be sold this fall.